MICRO CAPS HUNTING: SINGLE, DOUBLE OR TRIPLE BOTTOM

* PROFESSIONAL BOTTOM FISHERS STUDY CHARTS BEFORE BUYING
A Bottom Fisher is an investor who looks for bargains in the market. In the stock market, he/she is looking at companies whose prices have recently dropped dramatically. The bottom fisher believes that the price drop is temporary. The price drop could have been caused by an overreaction to recent bad news or because a big seller wants to be out of his position in a short amount of time. The belief is that the stock will fly on the way up. A bottom fisher wants to dig on stocks that have become undervalued simply because of some kind of market miscalculation. Bottom fishers come out in bear markets because a flurry of stocks are getting whipped as investors panic. When people panic, they will sell anything, even something good. Irrational thinking affects many investors during periods of crisis. One favorite tool used by professional bottom fishers is the use of stock charts. Of course fundamental analysis is important too but identifying a bottom is the stock charters' job. In a quick drop, we have a single drop with that triangular bottom. In a prolonged drop, then the double and triple bottoms are more indicative for a substantial support level for a stock. The triple bottom shows that the longer term support may justify that the stock doesn't want to drop below that particular level. Therefore, a rally is possible. If fundamentals, management, industry favoritism and company growth potential are working together, then you may have a real winner.